Marital Assets and Liabilities Part 5 of 15 | Divorce Attorney Fort Myers/Naples

Enhancement in Value and Appreciation

  • Enhanced by marital funds or labor. Pursuant to Fla. Stat. §61.075(6)(a)1b, a non-marital asset may be altered into a marital asset to the extent that its value has been enhanced by marital funds or labor.
  • Active Appreciation. However, the appreciation must be attributable to active appreciation, instead of merely passive appreciation. Cole v. Robert, 661 So.2d 1156 (Fla. 2d DCA 1995).
  • Burden of Proof. On the wife to establish that:
    1. The Husband actively managed his accounts during the marriage;
    2. As a result of the Husband’s marital efforts, his accounts enhanced in value; and
    3. The actual value of the enhancement. Gromet v. Jensen, 2015 WL 5973933 (Fla. 3d DCA 2015)
  • Mortgage Reduction. Increase in equity resulting from paying down the mortgage with marital funds constitutes a marital asset subject to equitable distribution Kaaa v. Kaaa, 58 So.3d 867 (Fla. 2010) Somasca v. Somasca, 2015 WL 4610463 (Fla. 2d DCA 2015)
  • Passive Appreciation in Value of Home Test. Kaaa v. Kaaa, 58 So.3d 867 (Fla. 2010)
    • When a marital home constitutes nonmarital real property, but is encumbered by a mortgage that marital funds service, the value of the passive, market-driven appreciation of the property that accrues during the course of the marriage is a marital asset subject to equitable distribution under section 61.075(5)(a)(2)
    • passive appreciation of the marital home that accrues during the marriage is subject to equitable distribution even though the home itself is a nonmarital asset.
  1. First, the court must determine the overall current fair market value of the home.
  2. Second, the court must determine whether there has been a passive appreciation in the home’s value.
  3. Third, the court must determine whether the passive appreciation is a marital asset under section 61.075(5)(a)(2). This step must include findings of fact by the trial court that marital funds were used to pay the mortgage and that the non-owner spouse made contributions to the property. Moreover, the trial court must determine to what extent the contributions of the non-owner spouse affected the appreciation of the property.
  4. Fourth, the trial court must determine the value of the passive appreciation that accrued during the marriage and is subject to equitable distribution.
  5. Fifth, after the court determines the value of the passive appreciation to be equitably distributed, the court’s next step is to determine how the value is allocated.
  • Burden Shift. Once it is proven that there was active appreciation of a non-marital business or property, the burden then shifts to the other party to show that some, if any, portion of the enhanced value is exempt from equitable distribution. Gaetani-Slade v. Slade, 852 So.2d 343, 347 (Fla. 1st DCA 2003).

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